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The Aqua Way: Hollow Promises Today, Rate Hikes Tomorrow

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The Aqua Way: Hollow Promises Today, Rate Hikes Tomorrow
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Aqua claims that it will keep the rates of the CWA’s 200,000 ratepayers flat for a decade. It is a promise Aqua has no intention—or ability—to keep. 

Aqua cannot promise to keep rates flat because Aqua does not set the rates. The Pennsylvania Public Utility Commission (PUC) does. And it is guided by a policy known as “single tariff pricing.” This policy essentially requires similar customers to pay similar prices for similar services. That means if CWA ratepayers become Aqua ratepayers, they will need to pay rates similar to what Aqua charges its ratepayers—rates much higher than what they pay under the CWA.

Aqua has a long record of imposing enormous rate increases, and the last few months are no exception. In connection with Aqua’s recent purchase of a sewer system in New Garden Township, Chester County, Aqua released a statement on August 20, 2021 advising that they have filed an application with the PUC requesting to increase bills for New Garden Township wastewater customers by 34.7 percent (hiking the average monthly residential wastewater bill from $55.51 to $73.95).1

As to customers outside of New Garden Township, the Philadelphia Inquirer has reported that Aqua is seeking to increase water bills by 17% and sewer bills by 33%. The article notes that “[t]he combined rate increase would raise Aqua Pennsylvania’s annual revenue by $98 million, about 18%, according to an Aqua spokeswoman.” The article further states: “Aqua last raised bills in 2019, when the PUC approved a boost of 9.8% in the bills for water customers and 34.6% for wastewater customers. The final rate increase was about two-thirds of what Aqua first sought.”2

Expert analysis has concluded that the average residential customer in the CWA’s service area will end up paying more than $500 extra per year under Aqua’s rates.3 This impact will be especially devastating on City of Chester residents, many of whom are already below the poverty line. Also, large commercial and industrial customers in the City will end up paying millions of dollars more under Aqua’s rates. This could drive existing businesses to leave the City if faced with such large cost increases. These much higher rates will also make the City less competitive for attracting new businesses, which is key to the City’s long-term health. All of these rate increases will come with no added benefit to customers. 

To be clear, Aqua is currently actively seeking to raise rates for its customers throughout Pennsylvania and will certainly not stand in the way of the PUC’s use of “single tariff pricing” to justify rate hikes. As a for-profit corporation, Aqua’s executives have a duty to their shareholders to maximize profits and, to that end, the company is laser-focused on expanding its territory to every corner of the Commonwealth. Aqua has been on a buying spree across Pennsylvania ever since the 2016 enactment of Act 12, and its pursuit to monopolize Pennsylvania’s water is an expensive one. 

If the CWA is sold to Aqua, it will be CWA ratepayers who will pay for Aqua’s future acquisitions. Every single CWA ratepayer will be chipping in to provide the funds that Aqua will use when it goes down the road to the next town. As reported by the Inquirer in August, “[i]n an annual report filed with the PUC, Aqua reported making net income of $188 million last year on $509 million of operating revenue.”4 Compare this business model with that of the CWA—a non-profit where all of its money goes toward running the CWA for its ratepayers. 

Aqua can say whatever it wants about the financial implications of its proposed takeover of the CWA. Proof, however, is in its actions, not its words.

Footnotes:

[1] See “New Garden residents respond to Aqua’s proposed rate increase,” by Richard Gaw (Sept. 21, 2021), at: https://www.chestercounty.com/2021/09/21/368938/new-garden-residents-respond-to-aquas-proposed-rate-increase

[2] See “Aqua Pa., big buyer of town utilities, seeks to boost suburban water bills 17% — and sewer charges far more,” by Andrew Maykuth (Aug. 23, 2021): https://www.inquirer.com/business/aqua-pennsylvania-seeks-water-wastewater-rate-increase20210823.html

[3] See expert report on water utility rate setting at: https://chesterwaterfacts.com/expert-reportshows-that-aqua-rates-are-significantly-higher-than-cwas/

[4] See “Aqua Pa., big buyer of town utilities, seeks to boost suburban water bills 17% — and sewer charges far more,” by Andrew Maykuth (Aug. 23, 2021) (emphasis added): https://www.inquirer.com/business/aqua-pennsylvania-seeks-water-wastewater-rate-increase20210823.html

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